DRAFT SURVEY BY THE SECRETARIAT ON SUBSIDIZATION MEASURES

Transcription

1 GENERAL AGREEMENT ON TARIFFS AND TRADE Panel on Subsidies RESTRICTED 10 April 1961 DRAFT SURVEY BY THE SECRETARIAT ON SUBSIDIZATION MEASURES I. General 1. At the Panel's February I96I meeting, the secretariat undertook to draft a descriptive analysis of the types of subsidies maintained by contracting parties, the reasons for maintaining subsidies and the total amount and level of subsidies. The main purpose of the survey was to facilitate the work of the Panel in the preparation of a draft report on the review of the operation of the provisions of Article XVI (L/1423). 2. It had been suggested by the Panel that the secretariat should, in its survey, rely principally upon the notifications on subsidies submitted by contracting «parties. It will be noted, however, that to date, only fifteen contracting parties have submitted notifications in reply to the revised questionnaire contained in document L/1315. In view of the relatively few countries oh which detailed information has been available, the secretariat has been required to depend extensively on earlier subsidy notifications or on the background documentation for Committee II. (See Annex for the list of documents examined.) Although these sources have enabled the secretariat 2 to extend its survey to include thirty-four countries, they have, nevertheless, not permitted the secretariat ' s study to be as complete *3d acerbate as would be desired. The secretariat therefore considers it desirable that contraflmifc parties Those countries are marked with asterisks in footnote 2 below. 2 Australia*, Austria*, Belgium, Brazil, Burma, Cambodia, *, Ceylon*, Czechoslovakia, Denmark*, Finland*, France, Germany*, Ghana, Greece, India*, Indonesia, Israel, Italy, Japan*, Luxemburg, Malaya, Netherlands*, New Zealand*, Norway, Rhodesia and Nyasaland, Sweden*, Switzerland, Tunisia, Turkey*, South Africa, United Kingdom*, *, and Yugoslavia. Speo(6l)ll4

2 Speo(6l)lH Page 2 should submit any corrections or additions on the following text in order to ensure that the information contained in this paper is accurate and up to date. 3. The secretariat survey does not cover measures such as the following which might be considered as subsidies granted purely for social reasons or for structural improvements (1) subsidies for land reform; (2) subsidies for extention services, research and training; (3) taxation facilities and direct income support for particularly low income producers; (4) crop and livestock insurance; (5) credit facilities. 4. For the purpose of the detailed examination of subsidization measures, the following products have been selected : Por subsidies relating to production; cereals (wheat and barley), dairy products, meat, sugar, vegetable oilseeds and vegetable oils, eggs, potatoes and cotton. For subsidies relating to exports; cereals, dairy products, sugar, meat vegetable oilseeds and vegetable oils, and eggs. Although it is recognized that consumption or import subsidies and production control by means of acreage limitation etc. might have the effect of reducing or mitigating any adverse effects of production or export subsidies on international trade, these measures have also been excluded from the detailed examination. II. Scope of subsidies 5. An examination of subsidy notifications submitted by contracting parties indicates that no major changes have occurred in recent years in government subsidization policies although some adjustments have been made in the products subject to these policies and in the amounts of subsidies granted. won-primary products have been excluded from the detailed examination for the reasons given in paragraphs 6, 8 and 10.

3 Page 3 6. It is noted that, while subsidization measures for primary products in relation to production and export have been notified fairly extensively, few subsidies on non-primary products have been reported to the CONTRACTING PARTIES. Subsidies relating to production 7< As regards direct production subsidies or other forms of governmental financial support to domestic production, some forty groups of primary products are granted direct production subsidies or otherwise affected by other forms of governmental financial support. The commodities which are most commonly subject to such subsidies are cereals (in approximately twenty out of thirty-four countries examined), dairy products (in approximately seventeen countries), meat (in some ten countries), and sugar and vegetable oilseeds and oils (in some nine countries). Other important primary products, including cotton, eggs, potatoes and tobacco, are subject to similar subsidies in several countries (see Table I). 8. In contrast with the situation for primary products, an examination of subsidy notifications indicates that non-primary products are subject to direct production subsidies or other forms of governmental financial support in a very limited number of oases as far as the number of products involved and the number of countries maintaining such measures are concerned. Some eleven non-primary products, including rayon yarn, various textiles, film, etc., are benefiting from such measures in one or two countries; the share of these subsidized products in international trade appears to be insignifioant. 'Only wheat and barley have been examined.

4 Spee(6l)ll4 Page 4 Table I Selected primary products subject to direct production subsidies, etc.. Item Barley Number of countries maintaining subsidies Countries Australia, Austria, Brazil,., Denmark, Prance, Germany, Greece, India, Italy, Japan, Luxemburg, Netherlands, Norway, Sweden, Switzerland, Turkey, United Kingdom,, Yugoslavia., Denmark, Germany, Japan, Netherlands, Norway, Sweden, Turkey, United Kingdom,, Yugoslavia. Dairy products Meat Sugar Vegetable oilseeds and vegetable oils Australia, Austria, Belgium,, Finland, Prance, Germany, Israel, Luxemburg, Netherlands, Norway, Rhodesia and Nyasaland, South Africa, Sweden, Switzerland, United Kingdom,. Burma,, Finland, France, Luxemburg, Norway, Rhodesia and Nyasaland, South Africa, United Kingdom, Yugoslavia., Denmark, France, Japan, Netherlands, Switzerland, Turkey,, Yugoslavia., Ceylon, Prance, Israel, Japan South Afrioa, Switzerland, Tunisia,., France, Germany, Israel, New Zealand, South Africa, United Kingdom. Apart from these nine countries, the United Kingdom maintains the system of guaranteed prices, but holds the view that the system does not fall under the provisions of Article XVI.

5 Spec(6l)ll4 Page 5 Item Number of countries Countries maintaining subsidies Potatoes 7 Germany, Israel Japan, Netherlands, South Africa, Switzerland, United Kingdom Cotton 5 Australia, Burma, Greece, Israel, Subsidies relating to exports 9. As regards export subsidies or other forms of governmental financial aids to export, some fourteen groups of primary products are granted direct export subsidies or otherwise affected by other forms of governmental financial aid. The commodities which receive such supports are most commonly dairy products (in approximately ten of the thirty-four countries examined)* and cereals (in some seven countries) and meat (in some eight countries). Other important commodities which receive such supports in a smaller number of countries include sugar, eggs and vegetable oilseeds. Exports of cotton are subsidized in the (see Table II). 10. In sharp contrast with the situation for primary products, no direct export subsidies have been notified to the CONTRACTING PARTIES by any contracting party with respect to non-primary products. An examination of subsidy notifications indicates that no information is available as to other.forms of governmental financial aids to exports of non-primary products, except in extremely few cases such as the Danish "Dollar Export Incentive Scheme" which, however, is expected to be abolished by the end of I96I.

6 Page 6 Table II Selected primary products subject to direct export subsidies and other forms of government financial support affecting exports Item Dairy products Cereals Meat Sugar Number of countries maintaining subsidy Countries Belgium,, France, Luxemburg, Netherlands, Norway, South Africa, Sweden, Switzerland,. Australia, Belgium, France, South Africa, Sweden, Tunisia, United States. Austria, Belgium,, France, Luxemburg, Netherlands, South Africa, Sweden. Australia, France, Netherlands, Turkey. Vegetable oilseeds and vegetable oils 3 4 South Africa, Tunisia,, Belgium,, South Africa, Sweden. Apart from these seven countries, Luxemburg maintains a so-called "levy subsidy" to help wheat exports but holds the view that the subsidy does not fall under the provisions of Article XVI.

7 Spee(6l)U4 Page 7 III. Main types of subsidies A. Subsidies relating to production 11. Various types of subsidization measures have been employed by a number of countries, reflecting the different needs of, and different situations in, the countries concerned. The main types of subsidies relating to production may be summarized as follows: (a (t (c (d (e (f (g (h (i a (k (i (m Direct production subsidies (sixteen countries) Deficiency payments (eight countries) Support purchases (twelve countries) Special loans () Certain quality bonuses (seven countries) Freight subsidy (three countries) Certain stabilization funds (three countries) Certain equalization funds (two countries) Levy subsidy (France) Combined system of levy subsidy and government contribution (two countries) Price and purchase guarantee by contract (Switzerland) Acreage payments (two countries) Storage premiums (three countries) Table III Main types of direct production subsidies, and other forme of government financial support affectj"p ^yoduetion Types of subsidies Items Country (l) Direct subsidies 1. Cereals 2. Dairy products Brazil Milk Austria,» Finland Milk and milk products Norway Uhole milk Rhodesia & Nyasaland Butter South Africa Butter and cheese Australia Dairy products Sweden Dairy products Belgium (other than butter) "These measures and other types os subsidization are enumerated in Table III, together with the information on the commodities and countries involved.

8 Page 8 Type of subsidies (2) Deficiency payments Cereals 2. Dairy products S Items Meat Calves and Livestock Sugar Eggs Cotton Barley Milk Meat cows Fat cattle, fat sheep and fat Sugar beet Vegetable oilseeds and oils Soyabeans Colza Eggs Potatoes lamb, Pigs Country United Kingdom Rhodesia it Nyasaland France, Turkey, United States New Zealand Australia, Greece Austria».Denmark, Germany^, United Kingdom Germany^, United Kingdom Israel, Netherlands, United Kingdom United Kingdom Switzerland 8«Cotton Israel United Kingdom Netherlands, Switzerland, United Kingdom Ttogcl pi protiatoas oalst fox tlvo uso of doticioncy payments. It appears tlkit tfro system has not boos Jjc&otaented at least for the past three years.

9 Page 9 Type of subsidies Items (3) Support purchases 1. Cereals Barley 2. Dairy products Manufacturing milk and butterfat Butter and Cheddar cheese Butter, cheese and skim milk powder 3. Meat Hogs, pigs and good lambs 4. Sugar (beet sugar) 5. Vegetable oilseeds and oils Rapeseed Soyabeans Olive oil Peanuts, flaxseed, and dry edible beans Country Germany, Greece, India**, Italy, Japai Netherlands^, Norwaj Switzerland, United States, Yugoslavia 2 Germany 1, Japan, Norm, Yugoslavia 2 Netherlands 4 Japan Japan Japan 5, Tunisia inégal provisions exist for the use of the system. It appears that the system has not been Implemented at least for the past three years* ^Although logo! provisions oxlst for the use of the system, it appears that the system has not been Implemented. 3 Although it is stated that any losses on the purchase of wheat at the support price level are covered by the Agricultural Equalization i"und, no figures are available. 4 In 1959 no government funds were used for this purpose. The Government has not purchased the products, other than the exceptional purchase of 6,000 tons of rapeseed in 1958.

10 Page 10 Type of subsidies Items Eggs (Grade A large eggs) Potatoes Potatoes and sweet potatoes 8. Cotton (upland) Country Japan (4) Special loans 1. Cereals Barley 2. Vegetable oilseeds Peanuts, tungnuts, flaxseed, soyabeans, and dry edible beans 3. Cotton Upland and extra-long staple cotton (5X Certain quality bonuses 1. Cereals 2. Dairy products 3. Meat 4. Barley Milk Cheese Hogs Bovine cattle and swine breeding Cattle Potatoes with high starch content Austria, Turkey Turkey Rhodesia & Nyasaland, Germany Luxemburg Yugoslavia Germany <6) Storage ^remiups Cereals, Denmark, Swed (7) Freight subsidies 1. Dairy products Milk 2. Meat 3. Sugar beets Finland, Norway Norway Turkey

11 Page 11 Typo of subsidies (8) "Structural" subsidies Items 1. Cereals 2. Dairy products 3. Meat Luxemburg Luxemburg Luxemburg (9) Marketing schemes 1. Vegetable oilseeds and oils Groundnuts, sunflower - and dried beans South Africa 2. Eggs 3. Potatoes Israel, South Africa Israel, South Africa (101 Certain stabilization funds 1. Meat 2. Vegetable oils Olive oil 3. Eggs Burma, France, South Africa France France til) Certain equalization funds 1. 2«Sugar Eggs Denmark Standard eggs Geimany (12) Milling premiums Cereals Switzerland (13) Acreage payments 1. Cereals Barley 2. Dairy products Sweden (14-) Combined systems of "levy-subsidy" and government contributions (15) Levy-subsidies Cereals Dairy products 2 3 Australia, France France T[t is not possible to confirm whether the operation of the system Involves any government funds. Tfo contribution from government funds were made up to TJhe share borneby the State has dropped considerably over the past few years.

12 Page 12 Type of subsidies (16) Price and purchase guarantees by contract (17) Disposal subsidies (18) Delivery allowances (19) Indemnification (20) Special vouchers (21) Safety margin subsidies (22) Refunds (23) Good dairy bonuses (24) Development funds (25) Assistance to newlyestablished farmers Items Sugar beet Dairy products Cheese Sugar Sugar Meat (livestock) Dairy products Milk Sugar Dairy products Cotton Vegetable oilseeds Groundnuts Country Switzerland Switzerland Turkey Netherlands Finland Rhodesia & Nyasaland Yugoslavia Rhodesia & Nyasaland Burma Israel For some of the main types of subsidies listed in paragraph 11 above, a brief explanation is given below: Deficiency payments 12* Price guarantee systems by means of deficiency payments are implemented in some eight countries. In all cases, producers receive a payment representing the difference between the higher guaranteed' domestic price and the lower market price. Some examples are given below: (a) National average market price and guaranteed prioe In the United Kingdom, producers of cereals, milk, meat, eggs and potatoes receive a deficiency payment representing the difference between the national average market price and guaranteed price fixed by the Government.

13 Page 13 lb) Annual minimum price and market price Minimum prioes fixed by the Government are guaranteed to producers of cereals in the Federal Republic of Germany. If the minimum prices are not realized on the market, the Government agency takes over the products at minimum prices. The difference between the prices is met by the State fund. (c) Basic price and guaranteed price In Austria, wheat producers receive a deficiency payment representing the differenc between a basic price and a guaranteed price. (d) Guaranteed minimum price and market price In the Netherlands, the difference between the guaranteed minimum price and market price for milk is met through a deficiency payment. Support purchases 13. Some twelve countries have undertaken to provide a government fund for price and income support purchases by the government. Some examples are given below: (a) Annual minimum price and market price If the minimum price fixed for wheat is not realized on the market, the Government of the Federal Republic of Genaany purchases the product at the minimum price. The difference between the two prices is met by the State budget. (b) Government purchase price and selling price In Japan, a major part of domestic wheat production is purchased by the Government at a fixed purchase price. Incidental expenses resulting from the difference between the Government purchase price and selling price are met by the State budget. (c) Compulsory partial collection supplied through a compulsory partial collection system is purchased at a fixed guarantee price in Italy. The Government contributes to the cost of the price support scheme. (d) Government purchase price and import price In addition to the basic subsidies for wheat production, additional subsidies are paid to producers in Norway. Additional subsidies represent the difference between the purchase price paid by the State Monopoly and the current import price.

14 Page 14 { ) Purehaso agreement In the, «neat producers enter into an agreement with the Government whereby the latter agrees to buy from producers at the support price a quantity specified in the agreement. A subsidy is involved insofar as eventual losses in the operation of Government purchases and sales are met by the State budget. Special loans 14. The system in force in the might be cited as an example. Producer prices of cereals, vegetable oilseeds and cotton are supported by loans to eligible producers. Producers havo the privileges of redeeming the loan at any time prior to maturity date by repaying the loans plus interest and any other charges. The Government's eventual losses represent the difference between the amount advanced and the amount when the collateral is disposed of by the Government. Combined system of levy-subsidy and government contribution 15. The price guarantee systems in force in Australia and Franco, for example, appear to come under this heading. In Australia. a price guarantee for wheat applies only to tho quantity of domostic production which is to be exported. The operation of such stabilization arrangements involves the building up of a fund from a levy on exports when the average price exceeds the determined cost of production and payments from the fund to producers if tho average price falls below the determined cost of production» If the fund is insufficient to meet the payments to producers, the deficiency would be met by the State budget. In Franco, there is a guaranteed minimum price for wheat which is only applied to wheat to bo denatured for cattle feeding purposes; the price is effected by means of produoer end Government contributions. Price and purchase guarantee by contract 16. Tho price support system in force in Switzerland for sugar beet might be described as an example. The price and purchase of sugar beet are guaranteed by contracts concluded with sugar refineries. The Government covers any deficit incurred by a refinery up to 50 per cent.

15 Page 15 B. Subsidies relating to exports 17. Various types of subsidization measures have boon employed by a number of countries reflecting the different needs of, and different situations in, the countries concerned. The main types of subsidies relating to exports can be summarized as follows :! (a (b (c (a (c (f (g (h (1 (j (k Direct export subsidies (eight countries) Export allowances (Netherlands) Export rebates (Australia) Exports of price support stocks at loss than domestic market price ( and the ) Exports at world prices below domestio support price (Franco) Exports at prices competitive with certain country's, produce () levy-subsidy (six countries) Combined system of levy-subsidy and government contribution (three countries) Combined system of levy-subsidy and pooling system (South Africa) Certain equalization funds (Sweden) Certain compensation funds (Turkey) "These measures and other types of subsidization are enumerated in Table IV, together with the information on the commodities and countries involved.

16 Spec(6l)ll4 Page 16 Table IV Main types of direct export subsidies and other forms of Government financial support affecting exports Type of subsidies (1) Direct subsidies Items 1 Cereals Country Kheat(sold under IWA) Belgium 2. Dairy products Butter Evaporated milk Dairy products Cheese o Netherlands, Belgium' France Switzerland Belgium* (2) Export allowances (3) Export rebates Meat Pigs Beef and livestock Vegetable oils Olive oil Eggs 1. Dairy products Cheese 2. Meat Bacon Sugar content of fruit products and other approved manufactured products ' Austria Belgium Tunisia Sweden Netherlands Netherlands Australia (4) Export of price 1. Cereals support stocks at less, flour, than domestic market corn, barley, grain price sorghum, oats, rice» rye exceptionally granted during the period of August-December 1959 Granted from 1 May I96I 3 Started as temporary measure in May 1958 and discontinued in November of that year. 4 Discontinued as from 1 May 1959

17 Page 17 Type of subsidies Items Country (5) Exports at world prices below domestic support price 2. Dairy products 3. Meat Non-fat milk and cheese Butter Pork Vegetable oilseeds and oils Peanuts, cottonseed oil (refined), tung oil and linseed oil Eggs Cereals and flour, Prance (6) Exports at prices competitive with certain n country's produce Dairy products Dry skim milk (7) Levy-subsidy 1. Cereals 2. Dairy products 3- Cereals Butter Cheese Meat "^To compete with exports. By fees levied on producers. Non-budgctayy measure. Live pigs, pig meat and animal fats Horn cattle and pigs Beef Pork By levies imposed on food, imported and domestic. 5 Mainly by means of levy collected from producers. 2 Tunisia Luxemburg^, Norway, South Africa Norway 2 Sweden, Luxemburg France g France, South Africa ay fees levied on all sales of cattle for slaughter. "Financedby the single budget tax on slaughtered" meat, financed by levies paid on slaughtered pigs.

18 Page 18 Type of subsidies Items Country Vegetable oilseeds Dried beans South Africa' Eggs South Africa' (8) Combined system of levy-subsidy and government contribution (9) Combined system of levy-subsidy and pooling system Cereals Maize Barley, rye, corn and rice Cereals Kaffir corn Australia South Africa France South Afrioa (10) Certain equalization 1. funds Cereals and rye 2. Dairy products Butter, cheese, condensed milk and milk powder Sweden" 3 Sweden (11) Certain compensation funds (12) Tax refunds (13) Donations Sugar 1. Vegetable oil Olive oil 2. Eggs Sugar Dairy products Dry skim milk Turkey Tunisia Belgium France T3y fees levied on producers.. 2 Government contributions have not taken place up to 1939* 3 No export subsidies are granted from the State budget»

19 Spec (61) 114- Page 19 For some of the main types of subsidies listed in paragraph 17 above, the following is a brief explanation: Export allowances 18. The system in force in the Netherlands might be given as an example. An allowance has been applied to cheese exports in order to defend an established market position against other suppliers which receive export aids. This allowance is financed by the Dairy Fund. Exporters of bacon also receive an allowance since normal processing costs cannot be recovered. Export rebates 19«When the world parity price is less than the domestic sugar price fixed under the statutory scheme, rebates equal to the difference between the two prices are granted to exporters on the sugar content of fruit products and other approved manufactured products exported (Australia). Er?cr*-s of price support stocks at less than domestic market prices 20. The systems in force in the and are important examples. In the price support stocks of wheat and flour, non-fat milk, butter, cheese, peanuts, cottonseed oil (refined), tung oil and linseed oil are exported at prices less than domestic market prices. The difference between'the two prices is met by a government fund. oats, rice and rye receive payment in kind. In addition, exporters of corn, barley, grain sorghum, In the case of, butter stocks are normally disposed of on the domestic market. However, part of the loss in resulted from the sale of about 13 million lbs. of butter to the United Kingdom at prices less than domestic support prices, following the shortage in Europe and in consultation with other interested suppliers. Surplus pork is disposed of at prices less than domestic support prices. Such disposal is carried out by means of sales and donations to international relief agencies and sales on certain export markets. Sales of stocks of eggs in the form of shell eggs, processed frozen whole eggs or egg powder have been made in selected export markets resulting in a net cost to the Government.

20 Page 20 Exports at world prices below domestic support prices 21. French exporters of wheat and flour receive a subsidy to cover the losses on the sale at world prices below the domestic guaranteed prices. Exports at prices competitive with certain country's produce 22. Exports of dry skim milk for human consumption in certain markets (mainly Central and South America) are made by at prices competitive with the ' product. Combined system of levy-subsidy and pooling system 25* In South Africa, export losses on kaffir corn are partly recovered from profits in pool and partly from a speoial levy on all kaffir corn malt sold locally by malt manufacturers. Certain equalization funds 24. In Sweden, a difference between the higher domestic price of wheat and rye and the price on the external market must be levelled out. Export losses are covered by an equalization fund. The same system is also applied to export losses on butter, cheese, condensed milk and milk powder (see footnote 3, page 18). Certain compensation funds 25* The system employed by Turkey with respect to sugar exports might be cited as an example. A subsidy is not directly paid to producers (exporters), but is transferred to the special account kept In the Treasury by the producers. The special account is credited with the difference between the fixed domestic sales price (KrO00/kg. ) and the cost of sugar plus the profit margin and consumption tax (Kr.28l/kg. ). Sugar is exported at world prices and losses are compensated from the positive fund.

21 Page 21 IV. Main reasons for maintaining subsidies A. Subsidies relating to production 26. A number of various reasons are given by governments for the maintenance of direct production subsidies or other forms of governmental financial support affecting production, depending upon the characteristics of the commodity situation and the policy objectives of the country concerned. might be broadly classified into the following six categories: (1) Reasons relating to production 1. To encourage domestic production; 2. To stablilize or secure domestic production; 3. To meet unfavourable conditions of production. (2) Reasons relating to cost of production and productivity 1. To lower cost of production and to increase efficiency; 2. To cover average production costs on efficiently managed farms; 3. To attain a market price level covering production costs; 4. To meet rising production costs. (3) Reasons relating to quality of the products 1. To improve the quality; 2. To encourage production of high quality products. (4) Reasons relating to prices 1. To stabilize prices; 2. To bridge the gap between the domestic and world market price; 3. To achieve free price development in the market. (5) Reasons relating to incomes 1. To stabilize producers* incomes; 2. To guarantee a reasonable income to produoers; The. main reasons 3. To guarantee the agricultural population the same standard of living as that enjoyed by other social groups* 4. To protect the i-elfare of those engaged in the domestic industry; 5. To maintain a large farming population.

22 SPQO(61)114 Page 22 (6} Reasons relating to marketing I* To provide assistance to farmers in the orderly marketing of crops. 2. To avoid government intervention in the market and to allow the orderly channels of trade to flow freely. 3. To ensure sales outlets. 4. To encourage exports. 5. To ensure a reasonable flow of the product to consumers. 6. To meet the restrictions on marketing resulting from overloaded commercial stocks* 27* The products and countries involved are enumerated as examples in Table Y below. It seems to be apparent that the most important reasons are those relating to prices and incomes. Policy objectives followed by almost all of the countries maintaining direct production subsidies and other forms of government financial support affecting production are generally attributed to the need to extend same form of protection to agricultural producers who are on the whole considered to be in a less favourable position than those engaged in other sectors of the economy. Table Y Main reasons for maintaining direct production subsidies and other forms of government financial support affecting production Reasons Products Countries (lj Relating to production 1. To encourage domestic production Calves (suitable for beef production) Breeding cattle (on hill farms) Livestock Sugar Cheese, butter and milk preserves Yegotable oilseeds (Colza) 8. Eggs 9. Cotton 10.Potatoes Denmark, Switzerland, Turkey, Yugoslavia United Kingdom United Kingdom Rhodesia & Nyasaland Japan, Yugoslavia Switzerland Switzerland Germany Australia, Burma Israel

23 Page 23 Reasons Products Countries" To stabilize or secure domestic production 3. To meet unf avourat>le conditions of production (2) Relating to cost of production and productivity 1, 2. Potatoes 1. To lower cost of production 1. and to increase efficiency d. Milk 2» To cover an average production cost on efficiently managed farms 3. To attain a market price level covering production costs 4. To meet the rising production costs Dciry products 3. Eggs 4. Potatoes 5. Groundnuts Potatoes Meat (beef, veal, pork, mutton and lamb) Finland, France, Japan Goimany, Japan, Netherlands Luxemburg United Kingdom Austria, Germany, United Kingdom United Kingdom United Kingdom Israel Switzerland Belgium (3) Relating to quality of the products 1. To improve the quality 2. To encourage production of high quality products 1. Hogs for slaughter 2. Bovine cattle and swine breeding Luxemburg 3. Cattle Yugoslavia 4. Eggs Germany 1. Cheese 2» Milk Germany, Rhodesia & Nyasaland (4) Relating to prices 1. To stabilize prices 1. Hogs 2. Pork 3. Lambs 4. Beef 5. Veal 6. Mutton 7. Meat 8. Potatoes, Belgium, Belgium Belgium Belgium Belgium France, South Africa Israel, Japan, South Africa

24 Page 24 R< Products Countries 2. To bridge the gap between the domestic and world market price 3* To achieve free price development in the market 9. Eggs Milk 12. Skim milk powder 13. Butter 14. Cheese 15. Dairy products 16. Butterfat 17. Olive oil 18. Groundnuts, sunflowers and dried beans 19. Peanuts, tung. nuts, flaxseed, soyabeans and dry edible beans 20. Cotton 21. Sugar Eggs Dairy products, South Africa Austria,, Italy, Japan,, Netherlands, Netherlands, Netherlands, South Africa Netherlands France Tunisia, France South Africa France, Denmark Germany Netherlands (5) Relating to incomes 1* To stabilize producers' incomes Milk 3. Butter 4. Dairy products 5. Butterfat 6. Cheddar cheese 7. Soyabeans 8. Rapeseed 9. Olive oil 10. Peanuts, tung nuts, flaxseed and dry edible beans 11. Sugar 12. Cotton 13. Potatoes, France, Japan, Japan Tunisia, France Israel, Japan, South Africa

25 Spec(61}114 Page 25 Reasons Produots fowrtrles 2. To guarantee a reasonable income to producers To guarantee the agricultural population the same standard of living as that enjoyed by other social groups To protect the welfare of those engaged in the domestic producing industry To maintain a large farming population 1. Milk 2. Skim milk powder 3. Butter 4. Cheese 5. Moat 6. Eggs 7. Dairy products Sugar Cheese, butter and milk Netherlands, Germany, Israel, Rhodesia & Nyasaland Netherlands Netherlands Netherlands France, United Kingdom Israel France, Luxemburg Sweden Switzerland f6) Relating to marketing of the products 1. To provide assistance to farmers in the orderly marketing of crops 2, 3. To avoid government intervention in the market and to allow the orderly channels of trade to flow freely To ensure sales outlets 4, To encourage exports 5» To ensure a reasonable flow of the product to consumers 6, To meet the restrictions on marketing resulting from the overloaded commercial stocks 1. Dairy products 2. Meat Vegetable oilseeds Eggs Potatoes' Cotton, milk, eggs and potatoes Dairy products Potatoes South Africa, United States South Africa South Africa South Africa United Kingdom France Israel Now Zealand

26 Page 26 B. Subsidies relating to exports 28» Various reasons are given by governments for the maintenance of export subsidies or other forms of governmental financial support to exports, depending, upon the characteristics of the commodity situation and the policy objectives of the country concerned. The main reasons for maintaining such subsidies might be classified into the following five categories. (1) Reasons relating to production 1. To maintain domestic production; 2. To protect the processing industry. (2) Reasons relating to prices 1. To stabilize prices; 2. To support producer prices; 3«To recover normal processing costs. (3) Reasons relating to incomes 1. To stabilize returns to producers; 2. To guarantee adequate incomes. (4) Reasons relating to surplus disposal 1. To dispose of stocks accumulated under domestic price support programmes; 2. To dispose of surplus production. (5) Reasons relating to marketing 1. To ensure orderly marketing; 2. To stabilize the market; 3«To ensure sales outlets; 4. To encourage exports; 5«To defend an established market position against other suppliers which receive export aids. 29. The products and countries involved are enumerated in Table VT below.

27 Table VI Page 27 Main reasons for maintaining direct export subsidies and other forms of government financial support affecting exports Reasons (1) Relating to production 1. To maintain domestic production 2. To protect the processing industry (2) Relating to prices 1. To stabilize prices 2. To support producer prices 3» To recover normal processing costs (5) Relating to incomes 1. To stabilize returns to producers 2. To guarantee adequate incomes (4) Relating to surplus disposal 1. To dispose of stocks accumulated under price support programmes To dispose of surplus production Products and flour Sugar Countries France Prance 1. Maize, kaffir corn, butter, dried beans and eggs South Africa 2. Beef Belgium, France J. Pork France, South Africa 4. Livestock Belgium Beef and pork Bacon 1. Sugar 2. France Netherlands Australia Australia France 1. Cereals (wheat and flour, com, barley, grain sorghum, oats, rice and rye) 2. Non-fat milk 3«Peanuts, cottonseed oil (refined), tung oil and linseed oil 4. Butter, dry skim milk, pork and eggs 1. Pigs Austria, 2. Beef and livestock Belgium 3» Horn cattle Luxemburg 4. Sugar Turkey Luxemburg 1958 only.

28 Page 28 Reasons (5) Relating to marketing 1. To ensure orderlymarketing 2. To stabilize the market 3. To ensure sales outlets Products Maize, kaffir corn, butter, pork, dried beans and eggs Evaporated milk butter Dairy products 4. To encourage exports Olive oil 5«To defend an established market position against other suppliers which receive export aids Cheese and Countries South Africa Belgium France Tunisia The Netherlands IV. Total amount and level of subsidies Although the revised questionnaire on subsidies (L/1315) requests all contracting parties to notify the total amount and level of subsidies, a large number of contracting parties have so far failed to reply to this request. The lack of detailed and authoritative information does not permit the secretariat to attempt, at this stage, a comprehensive analysis of the total amount and level of subsidies on a global basis. However, information available with respect to a certain number of countries is given in Tables VII and VIII. All figures available have been converted into United States dollars for comparison purposes. "Discontinued on 1 March 1959* Discontinued in November 1958* ^Discontinued on 1 June i960.

29 Page 29.ANNEX Basic Document^ Tjfo?mined for the Purpose of the Survey on Subsidization Measures A. Subsidy notifications 1. Hoplioa to tho rutisod questionnaire : L/1328 L/1328/Add,l L/1328/Add*2 L/1328/Add,3 and Corrigendum L/1328/Add,4 L/1328/Add,5 L/1328/Add.6 and Corrigendum L/1328/Add,7 L/1328/Add,8 L/1328/Add 9 and Corrigendum L/1328/Add,10 L/1328/Addcll L/1328/Add,12 L/1328/Add,13 L/1328/Add 14 Ceylon Finland Turkey New Zealand India United Kingdom Australia Denmark Sweden Federal Republic of Germany Netherlands Japan Austria 2, For other countries not enumerated in paragraph 1 above, the following notifications which had been submitted in accordance with the old questionnaire were taken into account: Belgium Brazil France Indonesia L/1131 and L/964/Add.7 L/964 L/1131/Add.l and Corrigendum L/880 L/1131 was also taken into account The Governments of Ceylon and Japan have submitted their notifications with the statement that they do not grant or maintain subsidies falling under Article XVI.

30 Page 30 Italy 1/1131 Luxemburg L/U31 and L/W/AdcUlO Malaya L/U31 Norway L/U3l/Add.2 and L/964/Add.l Rhodesia and Nyasaland L/964/Add«8 and Corrigendum South Africa L/U31 and L/964/Add.l 3* The following Governments have indicated that they do not grant or maintain subsidies falling under the scope of Article XVI: Note: Burma L/880 Czechoslovakia " Dominican Republic " Ghana L/1131 Greece L/880 Haiti " Pakistan L/ll3l/Add,5 Notifications have not been received from the following Governments: 2 Argentina?eru 2 2 Cambodia Portugal Chile Spain 2 Israel 2 Switzerland 2» ^ 2 Nicaragua Tunisia Nigeria Uruguay The Government have submitted their notification with the statement that they do not grant or maintain subsidies falling under Article XVI, h* ovisionally acceded or special relationship. A notification by the Government of Switzerland was received subsequent to the preparation of this document.

31 Bage 31 B Committee II documents A number of documents, which had been submitted by thirty-four contracting parties in relation to.the country consultations by Committee II, are listed in document COM.II/112, dated 3 March 1961 (Consolidated Summary Schedules on the Non-Tariff Measures for Agriculture)* These documents were used for the purpose of this survey only in cases where it was considered necessary and appropriâte